Chataqua Can Company manufactures metal cans used in the food-processing industry. A case of cans sells for $30. The variable costs of production for one case of cans are as follows: Direct material $8.00 Variable manufacturing overhead 7.50 Total variable manufacturing cost per case $18.00 Variable selling and administrative costs amount to $0.40 per case. Budgeted fixed manufacturing overhead is $455,000 per year, and fixed selling and administrative cost is $46,000 per year. The following data pertain to the company's first three years of operation. Year 1 Year 2 Year 3 Planned production (in units) 91,000 91,000 91,000 units), January 1 Actual production (in units) Sales (in units) Finished-goods inventory (in units), 91,000 91,000 91,000 62,500 28,500 91,000 105,250 14,250 December 31 Actual costs were the same as the budgeted costs. Required: 1. Prepare operating income statements for Chataqua Can Company for its first three years of operations using: a. Absorption costing. b. Variable costing. ite firet threo Dacocile Chatanua Can Comnanu'e onaratina income renartad under aheorntion and variahle cnetina for each n 2. Reconcile Chataqua Can Company's operating income reported under absorption and variable costing for each of its first three years of operation. Use the shortcut method. 3. Suppose that during Chataqua's fourth year of operation actual production equals planned production, actual costs are as expected and the company ends the year with no inventory on hand. a. What will be the difference between absorption-costing income and variable-costing income in year 4? b. What will be the relationship between total operating income for the four-year period as reported under absorption and variable costing? Complete this question by entering your answers in the tabs below. Req 1B Reqd 2 Req 3A Req 3B Req 1A are operating income statements for Chataqua Can Com pany for its first three years of operations using absorption costing. Year 1 Year 2 Year 3 Sales revenue 2,730,000 Less: Cost of goods sold Gross margin 0 S 2,730,000 Selling and Administrative Expenses Fixed selling and administrative Variable selling and administrative Complete this question by entering your answers in the tabs below. Req 1B Req 3A Req 3B Req 1A Reqd 2 Prepare operating income statements for Chataqua Can Company for its first three years of operations using absorption costing Year 1 Year 2 Year 3 2,730,000 Sales revenue Less: Cost of goods sold Gross margin Selling and Administrative Expenses 2,730,000 $ C C Fixed selling and administrative Variable selling and administrative Operating income $ C 0 2,730,000 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reqd 2 Req 3A Req 3B Prepare operating income statements for Chataqua Can Company for its first three years of operations using variable costing. Year 1 Year 2 Year 3 Variable expenses: 0 $ 0 0 Fixed expenses: 0$ 0 0 Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reqd 2 Req 3A Req 3B Reconcile Chataqua Can Company's operating income reported under absorption and variable costing for each of its first three years of operation. Use the shortcut method. Year Difference in fixed Change in inventory (in units) Predetermined fixed overhead expensed under absorption and variable costing overhead rate 2 3 Complete this question by entering your answers in the tabs below. Reqd 2 Req 3A Req 3B Req 1A Req 1B Suppose that during Chataqua's fourth year of operation actual production equals planned production, actual costs are as expected, and the company ends the year wi income and variable-costing income in year no inventory on hand. What will be the difference between absorption-costing Difference in reported income Reqd 2 Req 3B>